Senate supports Cabinet's tax plan, left-wing parties concerned about VAT increase

The Senate has agreed with the tax plan for next year. The package was supported by 49 of 75 senators. The resistance against the plan mainly came from the left-wing parties. They do not feel assured that the originally planned VAT increases on culture and sport will actually be taken off the table.

Just like with the education budget, the Cabinet had to adapt its plans to ensure support from the Senate for the tax plan. The Christian parties were favorably disposed by retaining the possibility of making tax-free donations, for example, to churches, and tax relief for families with one breadwinner.

The Cabinet also promised to look for alternatives to higher tax rates for the culture, sport, and book sectors.

Although the Cabinet has promised to develop alternatives, the VAT increase for 2026 is still in the tax plan. Senator Randy Martens of GroenLinks-PvdA does not believe that the uncertainty that this creates is a good way of making laws, something that the Senate assesses. The SP is also “not expecting a good outcome” when it comes to the VAT.

The promise made by the Minister of Finance, Eelco Heinen, to look for alternatives to increasing the VAT was sufficient for D66, and the Christian parties of CDA, SGP, and ChristenUnie to support the tax plan after all. Heinen did emphasize that the approximately 2 billion euros involved must be found elsewhere.

Furthermore, the tax plan ensures that all workers will pay a lower tax rate on the first part of their income next year. For those who earn the least, this advantage will be partly offset by a reduction in the general tax credit.

A part of the tax plan is also the abolition of the netting scheme, which currently still benefits private owners of solar panels. The Senate also agreed with this.

The Senate, in the same composition, rejected a proposal a year ago to gradually phase out the netting scheme. BBB and PVV were against it at the time, but during the negotiations for the formation of the Cabinet, they nevertheless agreed to end the scheme in one go as of 2027.